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In many industries (e.g. cars and clothing) manufacturing complexity and unpredictability have increased over the last couple of years because of an increasing variety of…
In many industries (e.g. cars and clothing) manufacturing complexity and unpredictability have increased over the last couple of years because of an increasing variety of products and shortening product life cycles. At the same time the manufacturers in these industries appear to have more problems with maintaining high quality levels. This paper aims to develop a methodology to study the effects of these developments on quality management systems.
At three European automotive manufacturers the two trends have been studied by means of a case study approach. Simons' four levers of control model is utilised to categorise and interpret the results of the case studies.
The application of a management control model in the field of quality management is found to be useful in explaining what changes are necessary to maintain high quality levels. From the case studies in the automotive sector it is concluded that there is a shift in quality management systems from a diagnostic towards a more interactive approach. This is in line with what can be expected as a result of the increasing uncertainty in the automotive sector, caused by shortening life cycles of car models and smaller batch sizes.
This research presents a novel application of Simons' four levers of control model to the field of quality management. Based on the experience with three case studies at European automotive manufacturers, this approach seems to have potential.
The purpose of this chapter is to provide a comprehensive review of empirical research on performance management (PM) in former communist Central and Eastern European…
The purpose of this chapter is to provide a comprehensive review of empirical research on performance management (PM) in former communist Central and Eastern European (CEE) countries, to evaluate the state of knowledge in this area and suggest possible directions for future research.
An examination of the literature was undertaken to review the empirical studies treating on PM in ex-communist countries from CEE. A total of 96 journal articles, PhD thesis, and conference papers were identified, categorized, and analyzed according to research questions, methodology, and theoretical framework. Contributions are classified by countries, according to progress in transition process (post-transition/transition countries) and membership in the Soviet Union (Soviet/non-Soviet countries). The review examines publications in four languages (English, French, Romanian, and Russian).
The literature review identified various stages of development of PM research and practice in the different groups of CEE countries.
In post-transition CEE countries, PM research follows the trends settled up in the developed countries (quantitative studies examining the extent of usage of different PM tools, influence of contingent factors, relationship PM-strategy, and impact on company’s performance). Also, the findings illustrate the modernization of PM practices: increasing importance of nonfinancial indicators and integrated performance management systems (PMS), although financial indicators are prevailing.
On the contrary, in transition countries PM research and practices are at an early stage, the reviewed literature highlights some specific issues related to transition context: the dynamic aspect of PM, change management, importance of informal systems, cultural aspects, and business traditions.
Because of the large number of CEE countries and the diversity of their national languages, many studies conducted in native languages have not been addressed in this literature review, which is essentially based on publications in English and French. Only for three CEE countries (Russia, Romania, and Moldova) publications in national language were considered.
This literature review may be useful for practitioners, providing insights on the extent of diffusion and usage of different PM tools and identifying difficulties and pitfalls to avoid in their implementation.
The chapter represents one of the first contributions to the knowledge about PM research and practice in former communist CEE countries. The adopted framework for reviewing and classifying the literature allows identifying the differences in PM research and practices between post-transition/transition and Soviet/non-Soviet countries.
This paper aims to evaluate the usefulness of two conceptual frameworks: levers of control (LOC) (Simons, 1995) and performance management systems (PMSs) (Ferreira and…
This paper aims to evaluate the usefulness of two conceptual frameworks: levers of control (LOC) (Simons, 1995) and performance management systems (PMSs) (Ferreira and Otley, 2009) for studying PM practices using a case study.
A case study method is used whereby data are collected through semi-structured interviews, examination of the group’s annual reports and internal documents.
A key finding of this study is the use of a PMS at the case company which is formally structured and with objectives, mechanisms and processes designed beyond a mere “performance measurement system.” While the case analysis indicates that most of the key components of the two frameworks are featured in the company’s PMS design, the uses of Simons’ (1995) LOC, however, are not consistent with the notion of “balance” as advocated by the model.
The evidence presented in this study is based on one large manufacturing company, and hence the findings cannot be generalized.
The findings of this study can be used in enriching the design of current proposed theoretical frameworks and also in encouraging management accounting researchers to continue the efforts of studying performance management (PM) practices.
A deeper understanding of PM practices using holistic frameworks has yet to receive more contested efforts from management accounting researchers. This paper attempts to contribute to this endeavor and fill in the gap in this area of research.
This study examines challenges to the retrospective financial evaluation of continuous improvement (CI) activities. Through a review of the literature and active…
This study examines challenges to the retrospective financial evaluation of continuous improvement (CI) activities. Through a review of the literature and active engagement with CI implementations, we identify several issues that may lead to divergence between operational and financial assessments. Out of this conflict emerges a set of concepts that we find important − the delineation of soft versus hard capacity benefits, the distinction between capacity used and capacity paid for, and the data gaps that relate to these benefits – and recognize operational improvement and financial improvement as distinct, yet interrelated, theoretical constructs. This study helps explain a series of persistent gaps in the management accounting literature: Conflict between operations and accounting managers, the divergent perspectives of Johnson and Kaplan after their publication of Relevance Lost (Johnson & Kaplan, 1987), and the need for both operational control (including detailed capacity control) and accounting control in CI firms. Instead of one control system being at odds with the other, or co-existing despite each other, each of these systems support a different component of the financial improvement process. Operational control systems in CI firms emphasize non-financial information and social and behavioral controls that empower decision-making by employees, while accounting control systems seek to motivate and translate operational gains into financial gains. Soft and hard benefits linked to capacity play an integral role in understanding the difference in focus of each control system, while data limitations help to explain why these systems remain loosely coupled in practice (or absent, as seems to be the case with detailed Capacity Management Systems).
Purpose – The purpose of this chapter is to present a state of the art of performance measurement and management control systems based on the papers presented in the 6th…
Purpose – The purpose of this chapter is to present a state of the art of performance measurement and management control systems based on the papers presented in the 6th Conference on Performance Measurement and Management Control in Nice, France, 2011. The chapter is structured around two main topics: performance measurement and control systems.
Methodology/approach – The chapter is based on a thorough review of all the papers presented at the conference. Each paper was classified according to the topic it dealt with and the methodology used in the paper.
Findings – We structure the papers around the following topics: cost measurement and management, mapping the landscape, financial measures, nonfinancial performance frameworks, performance measurement design, sector-specific measures, and marketing measures within performance measurement. The topics identified in management control systems are compensation, management control systems' design, motivational aspects, strategy, risk management and enterprise software, governance, nonprofit organizations, and innovation.
Research limitations/implications – The chapter provides a comprehensive review of these topics. The review is limited to the selection bias implicit in the papers submitted to the conference. However, with almost 200 papers, the conference includes a large set of papers and topics. The analysis indicates that the field is dynamic with close connections to practice and promising research lines.
Practical implications (if applicable) – This state-of-the-art review reveals relevant research findings for companies and organizations. It also indicates that the research community is tackling important issues to society and the evolution of research promises to offer interesting alternatives to tackle these problems.
Social implications – Performance measurement and management control systems are important topics for management. Recent work is extending the implications of these fields beyond companies to include nonprofit organizations and public sector departments. Advances will definitely shape the way societies are designed.
Originality/value of chapter – The chapter provides a review of the field based on the contributions at the conference. As such it portrays the state of the field and gives researchers as well as practitioners a quick way to update their knowledge of the topics that are dominating the field.
Purpose – The purpose of this paper is to develop a framework which sheds new light on how sustainability control systems (SCS) can be used in proactive strategic…
Purpose – The purpose of this paper is to develop a framework which sheds new light on how sustainability control systems (SCS) can be used in proactive strategic responses to corporate sustainability pressures.
Design/Methodology/Approach – Corporate sustainability pressures are identified using insights from institutional theory and the resource-based view of the firm.
Findings – The paper presents an integrated framework showing the corporate sustainability pressures, proactive strategic responses to these pressures, and how organizations might use SCS in their responses to the corporate sustainability pressures they face.
Practical Implications – The proposed framework shows how organizations can use SCS in proactive strategic responses to corporate sustainability pressures.
Originality/Value – The paper suggests that instead of using traditional financial-oriented management control systems, organizations need more focus on emerging SCS as a means of achieving sustainability objectives. In particular, the paper proposes different SCS tools that can be used in proactive strategic responses to sustainability pressures in terms of (i) specifying and communicating sustainability objectives, (ii) monitoring sustainability performance, and (iii) providing motivation by linking sustainability rewards to performance.
Despite extensive adoption of Simons’ Levers of Control (LoC) framework, there is still considerable diversity in its operationalization which impedes the coherent…
Despite extensive adoption of Simons’ Levers of Control (LoC) framework, there is still considerable diversity in its operationalization which impedes the coherent development of the literature and compromises its value to researchers. The purpose of this paper is to draw researchers back to the conceptual core of the framework as a basis for stable, consistent definitions of the domain of observables.
We derive the conceptual core of the framework from Simons’ writings. We highlight instability in existing operational definitions of the LoC, weaknesses in the extent to which these definitions reference this conceptual core, and inconsistencies in the restriction of LoC to formal information-based routines.
We draw on the inconsistencies identified to build the case for commensuration or a “common standard” for the framework’s use on two levels: the constructs within the framework (through reference to the conceptual core of the framework) and the framework itself (through explicit inclusion of informal controls).
We illustrate the benefits of commensuration through the potential to guide the scope of the domain of observables in empirical LoC studies, and to study LoC as complementary or competing with other management control theories.
Our approach to resolving tensions arising from inconsistencies in the empirical definitions of LoC differs from others in that we focus on the strategic variables underlying the framework to define the conceptual core. We believe this approach offers greater potential for commensuration at the level of the constructs within the framework and the framework itself.
Notwithstanding the relevance of managerial control systems (MCS) in any organization, as well the distinctive role they can play in family business, due to its specific…
Notwithstanding the relevance of managerial control systems (MCS) in any organization, as well the distinctive role they can play in family business, due to its specific features, the literature rarely dealt with the role and characteristics of MCS in family business. Taking into account previous contributions from different disciplines (organization, management accounting, and family business), the current work aims to better understand the state of the art about research in the field of MCS in family business in order to identify main research gaps and propose future research directions.
Forty-five articles have been analyzed, which were issued in 29 sources. Research findings show that the literature on MCS in family business is limited and not very conclusive. Some authors focused on the type of controls, other authors outlined the role of MCS in managerialization and the relation with professionalization. A few studies focused on some specific mechanisms, especially strategic planning and compensation. Some contributes dealt with MCS’ determinants and impacts. Differences between family and non-family firms were proposed. However, a clear and organized picture of the features of MCS in family firms, their determinants, and impacts has not yet been developed. Particularly, the impact of the distinctive features of family business on MCS represents an underdeveloped research field along with how MCS can be differently developed and used in different kinds of family firms. In the light of findings of the literature review, we propose a reference research framework on MCS in family business.
This paper examines how a public sector organization combined management control systems (MCS) to comply with increased uncertainty and conflicting objectives of tight…
This paper examines how a public sector organization combined management control systems (MCS) to comply with increased uncertainty and conflicting objectives of tight budget control, flexibility, and quality care simultaneously. It also analyzes how middle managers interpret management control intentions and manage conflicting objectives, and how locally developed MCS are coupled with top management goals.
This paper uses a case-study approach, based on interviews with top and middle managements, as well as document studies conducted at a medium-sized Danish municipality.
Both constraining and enabling control systems empower middle managers and facilitate tight budget controls. Furthermore, middle managers play a crucial role in the use of MCS, develop local control systems, adjust existing control systems and influence the decisions and strategies of top management.
This paper is context-specific, and the role of accounting in professional work varies due to the specific techniques involved.
This paper shows how MCS, including budgeting and planning systems, can be applied in social services to help middle managements obtain tight budget controls while also improving service quality.
This paper adds to the limited extant research on the role of middle management in a control framework and demonstrates how MCS can balance conflicting goals in social services when uncertainty increases. Furthermore, this paper shows how the vertical coupling of MCS is tight when budgeting is employed for planning purposes.